Wind power set a new record in Texas last Friday, heralding wind’s growing competitiveness with natural gas.
As CleanTechnica reports, instantaneous output from wind hit an all-time high of 10,296 megawatts for Texas’ main grid operator — the Electric Reliability Council of Texas (ERCOT) — at 8:48pm on March 26, 2014. Wind energy generation fluctuates over time, so instantaneous output marks the peaks of the fluctuations rather than the average amount of output that can be expected. As ERCOT’s press release pointed out, at the moment of Friday’s peak, wind energy was contributing almost 29 percent of the 35,768 megawatts being used at the time.
As a measure of raw power, the 10,296 megawatts record beat out ERCOT’s previous peak by over 600 megawatts. As a share of overall demand on the grid, however, instantaneous generation at 3:19am on March 27 reached all the way to 38.43 percent — but only by generating 9,868 megawatts out of 25,677 megawatts of systemwide demand.
As CleanTechnica points out, Texas’ wind boom was greatly helped along by a $7 billion project set in motion by the state legislature in 2008, which has revamped transmission lines. Texas already boasts more wind capacity than any other state, and the end goal of the transmission line project is to get the state to 18,456 megawatts of capacity.
The ERCOT grid alone already boasts 11,000 megawatts — enough to power 2.2 million homes when electricity use is highest, and far more when demand is lower. And another 8,000 megawatts are in the pipeline. As a result, wind power made up 9.9 percent of all the energy used in the ERCOT region in 2013 — a jump from 9.2 percent in 2012.
It’s also one sign among many of the increased competition wind is giving natural gas. The former beat out the latter as America’s biggest source of new electrical capacity in 2012. Power purchase agreements of $25 per megawatt-hour for wind farms were signed in the Midwest in 2013, according to the head of North American Equity Research for Power & Utilities and Clean Energy. That places wind in “fairly viscous competition” with coal and natural gas power in the region. And it’s one reason why wind is already 25 percent of Iowa’s power, with 50 percent expected by 2018.
The Daily Fusion also reported on a study out of Syracuse University in California last week, which found that the leveled cost of wind and natural gas have pulled almost even in the national market. Levelized cost accounts for all the costs of a source of energy — from installation to maintenance to the price of the electricity — across its entire lifecycle. The study also factored in wind’s higher intermittency, and natural gas’ greater price fluctuations — which will likely get worse as natural gas wells tap out over the next decade or two.
Most significantly, the study found that with the production tax credit (PTC), wind pulls virtually even with natural gas across the country. (Even without the PTC, wind is competitive with natural gas in some areas.) That’s important because wind and other renewables are left at a market disadvantage by America’s failure to price future damage from climate change into the cost of fossil fuels. Using the federal government’s estimates for the cost of carbon emissions, the Syracuse study found the PTC essentially negates the way not accounting for that cost tilts the playing field in natural gas’ favor.
“The true costs of electricity from wind power and natural gas are effectively indistinguishable, yet because the cost of carbon emissions is not included in the market price of gas, wind has not been a competitive form of energy use in most of the United States, without government pricing support,” Jason Dedrick, associate professor at theSchool of Information Studies (iSchool), told the Daily Fusion.
The best way to account for the cost of carbon emissions would be a national cap-and-trade system or a carbon tax, which would level the playing field for all forms of energy across the nation. But in their absence, the PTC serves as a second-best solution to make sure wind is treated a bit more fairly in the market.
Assuming, that is, the PTC is reinstated — Congress allowed it to expire at the end of 2013, and it has not been renewed.